House of Lords objects to the proposed regulation of Internet broadcasters

A Parliamentary committee has concluded that the Television Without Frontiers …

The attempt to overhaul European television regulations to take Internet broadcasting into account has run into resistance in the UK's House of Lords, where a parliamentary committee has expressed doubt about some of the proposed rules.

In its report, the Lords European Union Committee, Sub-Committee B, worries that many of the proposed changes to the Audiovisual Media Services (AMS) Directive are nothing short of protectionism. "We firmly reject the idea that regulators should act to preserve the market dominance of established players from new entrants," said the report, and added that the committee was also "unconvinced of the need for any quantitative restrictions on advertising in a market which is now clearly open to competition."

The row over the AMS Directive goes back to 1989, when the EU passed a set of regulations known as "Television Without Frontiers" that established a common broadcast policy across EU member states. Advertising content was capped at 15 percent of a broadcaster's daily transmission time, advertisements had to conform to certain rules (tobacco and prescription drugs were verboten), paid sponsorship and product placement were limited, etc. Satellite broadcasts that spanned multiple countries were also addressed, giving the rules their name.

The rules were overhauled in 1997 to better address the current state of a changing market. The overhaul came just before the explosion of Internet connectivity and the rise of "new media," and in 2005, it was decided that Television Without Frontiers needed yet another upgrade to make sure that new broadcasters had to play by the old rules (we reported on an earlier scare that the new directive would ban video bloggers). Along the way, the name was changed from the almost-catchy "Television Without Frontiers" to "Audiovisual Media Services," which sounds like the name of a dusty office full of cabling somewhere in the basement.

The Lords, led by Lord Freeman, worried that the broadcast market now had enough competition that regulatory changes might prove unnecessary. In the report, the committee pointed out that the number of TV channels across Europe has grown from 500 in 1989 to over 1,500 today. One of the key sections of the AMS is the regulation of advertising, but the Lords argue that consumers now have enough choice that they can decide for themselves how much advertising they elect to watch.

The worry is that additional rules will stifle the red-hot online advertising market in the UK, which is currently growing by 40 percent a year. The committee points out that Google UK is set to top the ad revenues from traditional broadcaster Channel 4 this year, and that broadband penetration in the UK is now a whopping 47.4 percent—far above US levels. Because AMS would cover any service that provides "moving images with or without sound, in order to inform, entertain or educate, to the general public by electronic communications networks," it could potentially affect everything from YouTube to the BBC's own online efforts.

The time to voice complaints is quickly running out; Germany currently holds the rotating EU presidency, and has announced that it wants to finalize the AMS by the end of June. Although the Lords do accept the need for reform, and remain in sympathy with many of the goals of the AMS, they are uncomfortable about extending it to new media businesses that are just beginning to come into their own.